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Kovrr financially quantifies cyber risk for insurance companies

 

If 2020 has taught us anything, it’s that the unexpected happens. Unforeseen situations can strike at any time and generate a tremendous disruption to organizations. Although it sometimes seems impossible, there are ways to be prepared for some adverse events. Cyberthreats are an example of events that can dramatically affect any organization. Unsurprisingly, they rank fifth amongst the major short-term risks identified by the World Economic Forum in its 2020 Global Risk Report.    

Israeli startup Kovrr enables insurers and reinsurers to financially quantify and manage cyber risk by using AI powered cyber risk models. This allows (re) insurers to financially quantify operationalize cyber risk management, profitably grow their cyber book, monitor cyber capacity, and set more accurate and realistic business premiums.   

Kovrr’s technology is based on monitoring global incidents in real time, the activity of hundreds of leading cyber-criminal groups, dozens of advanced persistent threats (APT) and the thousands of individuals operating in cyberspace. In addition, they have developed “the largest and most detailed exposure database in the industry containing firmographic and technographic details on millions of businesses worldwide”, according to Yakir Golan, CEO and co-founder of Kovrr.  

Kovrr’s value lies in its proprietary databases and modeling techniques which allow them to pinpoint cyber-attacks that can lead to significant losses. This allows them to provide accurate insights into potential financial damage affecting an insured which in turn affects a (re)insurers portfolio. The outcome of their analysis is a table of possible annual losses and a probability curve that shows the probability of exceeding particular levels of loss.  

One of the advantages that differentiates Kovrr from other competitors is the detail and variety of the data they use. With information based on simulations of over 100,000 events, including popular scenarios such as cloud data theft, ransomware and other attacks, they provide insurance professionals the ability to drill down into each type of risk and measure each of the likely associated losses. Furthermore, because they have localized, industry-focused data, they can provide highly accurate information on businesses worldwide.     

For Golan the idea of combining the use of massive data with artificial intelligence to create models of possible attacks came naturally. After years of marketing and business development for cybersecurity startups, he realized that his clients were increasingly asking him about insurance against cyber-attacks. Together with Shalom Bublil, Chief Product Officer and co-founder of Kovrr, and Avi Bashan, Chief Technology Officer, they discovered that there was a need for this type of data and modeling for insurers.   

The startup is now at a point where they are continuing to introduce innovations to their product and are challenged to make the market and companies understand the potential of damage cyber risks can cause. For this reason, the alliance with MAPFRE through insur_space represents a good opportunity for both parties. From MAPFRE, Kovrr can utilize the advice and experience of additional insurance professionals when developing new product offerings. On the other hand, a large insurance company can learn from this startup to find risks and efficiently allocate capital to cyber insurance for its own operations and those of its clients.    

This cross collaboration allows both entities to grow, especially with products that are in a phase of strong market penetration due to their high level of innovation. Cyber risk modeling is essential for the future of the insurance industry.